A Rhode Island-based hotel investor unloaded a portfolio of four Manhattan hotels for $489.8 million.
A fund managed by MCM, formerly Magna Capital Management, sold the portfolio of nonunion hotels to a group of large institutional investors. A different MCM fund will maintain partial ownership, according to CoStar, which first reported the deal.
A spokesperson for MCM, which shares an address with Magna Hospitality Group but is a separate company, declined to comment.
The portfolio includes the Hilton Garden Inn New York Times Square North, the Motto by Hilton New York City Chelsea, the leasehold for the DoubleTree by Hilton New York Times Square South and the leasehold for the Fairfield Inn & Suites New York Midtown Manhattan Penn Station.
The firm will keep a minority stake after trading more than 90 percent of its equity in the properties, Crain’s reported.
JLL brokered the deal, which marks the largest Big Apple hotel sale since the Safe Hotels Act went into effect in May. Critics of the law predicted that it would hurt the value of nonunion hotels by increasing expenses and eroding their cost advantage. So far, that doesn’t seem to be the case.
MCM bought the 21-story hotel building at 30 West 46th Street from Concord Hospitality in 2021 for $88.5 million and opened the 196-key Hilton Garden Inn New York Times Square North. The firm sold the property for $115.5 million.
A deed recorded with the city shows a sale price of $92 million but does not include the personal property value that is part of the final sale price, a source said. City National Bank provided a $77 million loan for the purchase, property records show
MCM bought the hotel property at 113 West 24th Street in Chelsea for $74.2 million in 2019, when it was still under construction. It opened the 374-key Motto by Hilton in December 2021 and sold it for $222 million. A deed filed with the city shows a sale price of $168.6 million. Apollo Global Management provided a $105 million loan.
A limited liability company tied to MCM took over the leasehold of 523 Eighth Avenue in 2021 in a deal valued at $47.4 million. It sold the 320-key Times Square property, a DoubleTree by Hilton, for $99.8 million.
MCM paid $57.4 million to buy the senior loan and take over the leasehold for the 239-key Marriott at 325 West 33rd Street in 2020. It sold the property for $52.3 million.
The relationship between Magna and MCM is unclear. Magna is known for scooping up distressed hotel properties and went on a Manhattan buying spree during the pandemic. In July, MCM made a credit bid of $10 million for Joe Moinian’s Midtown Hilton Garden Inn in a U.C.C. auction, giving it a pathway to take over the property.
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